SOUTH AFRICA – Convergence Partners, the private equity investment firm has announced the first close of its third fund after raising US$120 million.
The Convergence Partners Digital Infrastructure Fund (CPDIF) is targeting a final size of US$250 million.
The investment company now has more than US$400 million of capital under management.
Investors in CPDIF include the CDC Group (the UK’s development finance institution), the US International Development Finance Corporation, the European Investment Bank, the International Finance Corporation and Proparco (the private sector arm of the Agence Française de Développement — AFD Group).
“CPDIF investments will be driven by the infrastructure needs of the emerging growth themes in the digital infrastructure ecosystem, specifically fibre, wireless, data centres and towers, as well as 5G, cloud, Internet of things, artificial intelligence, fintech and network virtualisation,” Convergence said in a statement.
CPDIF’s first investment was in Ctrack, which was announced earlier this year.
“As a data analytics business servicing the fleet management and insurance industries, the business sits at the intersection of AI and IoT with all its solutions being cloud-delivered,” Convergence said.
“We are very pleased with the level of support from both repeat and new investors and believe this reflects our solid track record and the opportunity CPDIF presents at this crucial time in both a tech and African context,” said CEO Brandon Doyle in the statement.
Since its founding in 2006, Convergence Partners has invested in submarine cable systems, geostationary satellites, terrestrial long-haul, metro and access fibre, wireless networks, and data centres, as well related fields.
In February 2021, Convergence Partners acquired Ctrack’s operations in Africa and the Middle East from Nasdaq-listed Inseego.
The investment — the value of which was not disclosed, was the maiden investment for Convergence Partners’ third fund, the Convergence Partners Digital Infrastructure Fund (CPDIF).
The deal, which must still be approved by the Competition Commission in South Africa, gave Convergence Partners access to a telematics software-as-a-service digital infrastructure platform providing fleet management, insurance and weather telematics solutions and asset tracking solutions.
Chairman of Convergence Partners, Andille Ngcaba, said: “In the past 20 years, we have witnessed the exponential growth of internet penetration on the African continent. Internet penetration in sub-Saharan Africa alone has grown tenfold, compared to the threefold increase the rest of the world has seen. As Convergence Partners, we pride ourselves on contributing to this growth through our numerous communication infrastructure investments across the Continent. However, the COVID-19 pandemic has shown us that there is still much work to drive digital inclusion.”
“Today, Africa is experiencing the highest growth in international internet bandwidth compared to any other region in the world. As we embark on this journey as CPDIF, the next twelve years will be spent continuing to build on our original vision of ubiquitous pan-African communications. As the African Continental Free Trade Area (AfCFTA) commences in the same year, we embark on the next step of our journey as Convergence Partners. We believe that AfCFTA will benefit immensely from the availability of digital infrastructure. Our greatest strength is our knowledge of technology, investments, and deep understanding of the African market and cultures,” he added.
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